Bitcoin falls below $69K as Fed's Hammack warns of sticky inflation

Fed's Inflation Warning Weighs on Bitcoin

Hammack made her remarks in a speech prepared for the City Club of Cleveland. She acknowledged the US economy remains strong, with a stable labor market near full employment, but emphasized that inflation is above the Fed's 2% target and moving higher, with broad-based increases across goods and services.

The Cleveland Fed president said it is reasonable for the Fed to hold interest rates steady in the near term. Yet her remarks come ahead of the June 16-17 FOMC meeting, the first under new Fed chair Kevin Warsh, where rates are widely expected to hold at 3.5% to 3.75%. Fed policymakers signaled in April meeting minutes that rate hikes could be needed if inflation remains above the 2% target.

Bitcoin retreated after a two-month rally that took prices as high as $82,850. The pullback reflects broader uncertainty around monetary policy and its impact on risk assets.

ETF Outflows and On-Chain Activity

The move lower coincided with fresh pressure on bitcoin holdings. US spot Bitcoin ETFs extended their outflow streak to 11 consecutive days, recording $484 million in net outflows in the latest session.

On-chain data showed significant transfers. A wallet linked to BlackRock's IBIT transferred 6,164 BTC, worth more than $427 million, to Coinbase Prime, signaling potential selling pressure. Mt. Gox moved 10,423 BTC on Tuesday in its first on-chain activity in two months, with roughly 10,306 BTC valued at about $731 million sent to a new wallet.

These movements underscore the sensitivity of crypto markets to both macro headwinds and large holder repositioning.

"Based on the data, I'm more concerned about the growing risks of persistently elevated inflation than the risks to full employment and also that monetary policy may not be sufficiently restrictive to bring inflation down to 2 percent." — Beth Hammack, Cleveland Federal Reserve Bank President